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Lebanon pleads for world support Lebanon pleads for world support
(10 minutes later)
Lebanon has appealed to foreign donors for further financial aid towards its reconstruction following last year's conflict between Israel and Hezbollah.Lebanon has appealed to foreign donors for further financial aid towards its reconstruction following last year's conflict between Israel and Hezbollah.
Prime Minister Fouad Siniora told a donors' summit in Paris that without outside economic help Lebanon could face an uncertain political future.Prime Minister Fouad Siniora told a donors' summit in Paris that without outside economic help Lebanon could face an uncertain political future.
Donors including the US, France, the EU and Saudi Arabia have already pledged Some $5bn (£2.5BN) in aid and loans. Donors including the US, France, the EU and Saudi Arabia have already pledged some $5bn (£2.5bn) in aid and loans.
Lebanon hopes to raise up to $9bn for reconstruction and repaying huge debt.Lebanon hopes to raise up to $9bn for reconstruction and repaying huge debt.
In his opening comments, Mr Siniora thanked the participants from some 40 countries for their support.In his opening comments, Mr Siniora thanked the participants from some 40 countries for their support.
"Your support to our medium-term programme in the form of contributions and loans at concessionary rates with considerable front-loading that extends over the programme's duration is what is needed," he said."Your support to our medium-term programme in the form of contributions and loans at concessionary rates with considerable front-loading that extends over the programme's duration is what is needed," he said.
DONORS' PLEDGES US: $1bn (inc new $770m) France: $648m EU: $518mSaudi Arabia: $1.1bnWorld Bank: $1bnEIB: $1.25bn Rebuilding LebanonDONORS' PLEDGES US: $1bn (inc new $770m) France: $648m EU: $518mSaudi Arabia: $1.1bnWorld Bank: $1bnEIB: $1.25bn Rebuilding Lebanon
"Failure to achieve the programme's objectives could well jeopardise the broader goals of political and social stability and a strong democratic system.""Failure to achieve the programme's objectives could well jeopardise the broader goals of political and social stability and a strong democratic system."
He added that Lebanon, which had been on the path to economic recovery before the conflict, was "now on the verge of a deep recession".He added that Lebanon, which had been on the path to economic recovery before the conflict, was "now on the verge of a deep recession".
The French President Jacques Chirac, who is hosting the conference, said Lebanon was being reborn from the ashes and needed the international community's support.The French President Jacques Chirac, who is hosting the conference, said Lebanon was being reborn from the ashes and needed the international community's support.
"We know that financial stability is essential for political stability in Lebanon and so controlling the debt levels which after the hostilities of last year amounted to 180% of the entire national wealth is the first and most urgent task to be tackled," he said."We know that financial stability is essential for political stability in Lebanon and so controlling the debt levels which after the hostilities of last year amounted to 180% of the entire national wealth is the first and most urgent task to be tackled," he said.
France has offered to lend Lebanon $648m at a concessionary rate, while the European Union is promising another $518m in new aid and loans.France has offered to lend Lebanon $648m at a concessionary rate, while the European Union is promising another $518m in new aid and loans.
US Secretary of State Condoleezza Rice confirmed the promise of a new $770m aid package (to be approved by the US Congress), saying the pledge would bring the level of US aid to Lebanon since last summer to more than $1bn.US Secretary of State Condoleezza Rice confirmed the promise of a new $770m aid package (to be approved by the US Congress), saying the pledge would bring the level of US aid to Lebanon since last summer to more than $1bn.
Saudi Arabia in turn pledged an additional $1.1bn in aid ($1bn in development funding and an extra $100m gift to the government), while the World Bank and the European Investment Bank announced more than $2bn in aid.Saudi Arabia in turn pledged an additional $1.1bn in aid ($1bn in development funding and an extra $100m gift to the government), while the World Bank and the European Investment Bank announced more than $2bn in aid.
Debt-ladenDebt-laden
Large parts of Lebanon's infrastructure were destroyed during Israel's attempt to wipe out Hezbollah last year.Large parts of Lebanon's infrastructure were destroyed during Israel's attempt to wipe out Hezbollah last year.
Mr Siniora has powerful friends abroad but faces protests at homeMr Siniora has powerful friends abroad but faces protests at home
The country is also heavily indebted from the effects of 15 years of civil war in the 1970s and 80s.The country is also heavily indebted from the effects of 15 years of civil war in the 1970s and 80s.
Donations and soft loans are needed to generate confidence, stimulate investment and break the circle of public debt that saddled the country with a massive $40bn burden, says the BBC's Jim Muir in Beirut.Donations and soft loans are needed to generate confidence, stimulate investment and break the circle of public debt that saddled the country with a massive $40bn burden, says the BBC's Jim Muir in Beirut.
The Paris forum comes amid various clashes back in Lebanon:The Paris forum comes amid various clashes back in Lebanon:
  • Lebanese army soldiers and Islamist gunmen exchanged fire near a Palestinian refugee camp in southern Lebanon. Security officials said members of a small Islamist group opened fire on the troops as army units deployed outside the Ain el-Helweh camp, near the southern port city of Sidon The soldiers returned fire. It was the second such incident this month
  • Lebanese army soldiers and Islamist gunmen exchanged fire near a Palestinian refugee camp in southern Lebanon. Security officials said members of a small Islamist group opened fire on the troops as army units deployed outside the Ain el-Helweh camp, near the southern port city of Sidon The soldiers returned fire. It was the second such incident this month
  • In Tripoli, northern Lebanon, government loyalists and opposition followers exchanged fire after the funeral of a man killed in protests in the city a day earlier, wounding at least one person
  • In Tripoli, northern Lebanon, government loyalists and opposition followers exchanged fire after the funeral of a man killed in protests in the city a day earlier, wounding at least one person
    • On Tuesday, three people were killed and more than 100 were injured in some of the worst street violence in Beirut for years, when a general strike brought the country to a standstill.On Tuesday, three people were killed and more than 100 were injured in some of the worst street violence in Beirut for years, when a general strike brought the country to a standstill.
    The Islamic Hezbollah movement, which called the strike, has warned of more unrest unless Mr Siniora steps down.The Islamic Hezbollah movement, which called the strike, has warned of more unrest unless Mr Siniora steps down.
    Cost of not helpingCost of not helping
    Economists in Beirut say the Paris conference is extremely important, coming at a time when the alarm bells are ringing on the financial markets there.Economists in Beirut say the Paris conference is extremely important, coming at a time when the alarm bells are ringing on the financial markets there.
    The cost of helping Lebanon... is much less than the cost of not helping Lebanon Fouad SinioraLebanese prime ministerThe cost of helping Lebanon... is much less than the cost of not helping Lebanon Fouad SinioraLebanese prime minister
    Speaking to the BBC, Lebanese Economy Minister Sami Haddad said any money raised would help clear the deficit.Speaking to the BBC, Lebanese Economy Minister Sami Haddad said any money raised would help clear the deficit.
    "Most of it will go to reduce the debt and debt service... The grants that we will hopefully receive will reduce the debt principle," he said."Most of it will go to reduce the debt and debt service... The grants that we will hopefully receive will reduce the debt principle," he said.
    "We will probably also get some project finance, ie funding related to implementing some infrastructure projects.""We will probably also get some project finance, ie funding related to implementing some infrastructure projects."
    On Wednesday, Mr Siniora warned potential donors that "the cost of helping Lebanon, however expensive that might seem, is much less than the cost of not helping Lebanon".On Wednesday, Mr Siniora warned potential donors that "the cost of helping Lebanon, however expensive that might seem, is much less than the cost of not helping Lebanon".
    Economists say that anything above $3bn or $4bn in soft loans and grants would be good news.Economists say that anything above $3bn or $4bn in soft loans and grants would be good news.
    Below that level, the gathering would be seen as having failed to demonstrate confidence in Lebanon.Below that level, the gathering would be seen as having failed to demonstrate confidence in Lebanon.